Right Thinking from the Left Coast

Tag: Entitlement reform

So now that the Republicans have taken back both houses of Congress, what should they do for the next two years? Nothing, argues National Review:

The desire to prove Republicans can govern also makes them hostage to their opponents in the Democratic party and the media. It empowers Senator Harry Reid, whose dethroning was in large measure the point of the election. If Republicans proclaim that they have to govern now that they run Congress, they maximize the incentive for the Democrats to filibuster everything they can — and for President Obama to veto the remainder. Then the Democrats will explain that the Republicans are too extreme to get anything done.

They’ll say that anyway. If the Republicans proposed poached eggs for breakfast, the Democrats would denounce them as dangerous extremists. And I don’t think NRO actually believes this argument because they later say Republicans should force the Democrats to filibuster/veto popular legislation.

Even if Republicans passed this foolish test, it would do little for them. If voters come to believe that a Republican Congress and a Democratic president are doing a fine job of governing together, why wouldn’t they vote to continue the arrangement in 2016?

Which brings us to the alternative course: building the case for Republican governance after 2016. That means being a responsible party, to be sure, just as the conventional wisdom has it. But part of that responsibility involves explaining what Republicans stand for — what, that is, they would do if they had the White House.

So the Republicans shouldn’t govern. Instead, they should gear up for 2016 to take the White House and Congress at which point they will … what? … concentrate on keeping power?

I’m sorry, but I really don’t care about the Republican Party one way or the other. Whether governing hurts or helps their prospects in 2016 is irrelevant to me and should be irrelevant to people who are not actual party operatives. We had a unified Republican government for six years and the result was the most massive expansion of government power since the New Deal.

No. What we want from the Republicans is progress. What we want is for them to turn back the tide of government expansion. What we want is for them to … what’s that word … govern? The Republicans are on probation right now. It’s up for them to prove themselves worthy of getting power back.

There is precedent for governing and winning elections at the same time: Republicans worked with President Clinton and kept Congress and won the White House twice as a result. But they didn’t win because they grandstanded. The won because the accomplished things — welfare reform, spending restraint, NAFTA — that made them worthy of winning all three branches of government.

Yet Republicans mistake the meaning of the midterms at their own peril. These elections were a particularly frank repudiation of Barack Obama and the past six years of failed stimulus, disastrous foreign policy, and rotten economic news. Even the president’s historic health-care reform remains a negative with voters. But if the GOP thinks it has a mandate to return to the equally unpopular bailout economics and social conservatism of the George W. Bush years, it too will be sent packing as early as the next election.

You should read Nick’s entire piece, which breaks down the polling to show a decisive shift against big-government, in every respect.

It’s not enough for the Republicans to not be Obama. “Not Obama” isn’t going to be a candidate in 2016. In fact, Obama won’t be a candidate in 2016 (savor that relief for a moment). If the Republicans want to earn our votes in 2016, they need to accomplish things. They need to prove themselves worthy. They need to show that they can get government out our hair, despite the man in the White House.

How does this break down into nuts and bolts? On the day after the election, John Boehner and Mitch McConnell laid out an agenda for the next two years. It includes approving the Keystone XL pipeline, tax reform and fast track trade authority. It also includes three changes to Obamacare: raising to 40 the hours needed to qualify as a full-time employee for the employer mandate, exempting veterans from counting toward the 50-employee mark that triggers the coverage mandate and repealing the medical device tax.

These are all OK ideas and some of them — like fast track trade authority — are supported by the President. But it’s kind of small potatoes. It’ll make a nice first month, but it’s not exactly the Contract with America. I would prefer something a bit bolder.

This would involved finding things that the Democrats or the President will support. There’s a strain of thought among conservatives, exemplified by the NRO piece above, that working with Democrats will give “legitimacy” to Obama. Nuts to that. The country needs things done. And if we can the President on board, great.

But the Republicans should also pass legislation they know will be filibustered or vetoed. This could give the Democrats something to talk about in 2016 (“look at the extreme legislation we blocked!”). But I think it more likely, if Republicans are smart … OK, if they’re not too dumb … OK, if they’re not completely stupid … that it would give the Republicans something to run on in 2016. It would give the American people something to vote for, not just something to vote against. When the Republicans have run on a positive agenda — Reagan in 1980, Newt in 1994 — they have done well.

As for specific issues: the first on that list would be entitlement reform. The President has indicated that he is open to it. It’s time to call his bluff. The deficit has been shrinking in recent years but will soon begin to blow up as the bill for Baby Boomer retirees comes do. The time to act is now, before we are back in the land of trillion dollar deficits.

A lot of Republicans worry that overhauling Medicare and Social Security will open them up to attack from the Democrats. But here’s the thing: that’s going to happen anyway. The number of elections that have not included a Democrat “mediscare” campaign over the last forty years is precisely zero. The Democrats are going to demonize Republicans anyway. At the very least we could get something out of it. And if it costs the Republicans some seats, so be it. It would be worth it to slice trillions off our debt.

The counter-argument is they should wait until the Republicans have the White House as well. That way, they won’t have to compromise with Democrats and accept a tax hike or defense spending cuts in return for entitlement reform. I find that hope ridiculously optimistic. It assumes that Republicans will take the White House and keep the Senate. And it assumes that they will take the political risk of entitlement reform once they have full power, which I find unlikely.

Act now. At the very least, call the President’s bluff. Then you’ll have something to run on in 2016.

The second priority should be regulatory reform, which is sucking a couple of trillion dollars out of the economy. Probably the most important regulatory reform is the repeal of Sarbanes-Oxley, which is strangling our economy, halting IPOs and a nightmare for businesses. It’s the poisonous spider at the center of the web of economic malaise. President Obama will probably oppose this. Good! Make him stand with the bureaucrats and trial lawyers! Over 60% of the American people think regulation is too onerous, including many independents. This is a winning issue for Republicans.

Third would be an overhaul of the patent and copyright laws which are strangling innovation. The Republicans are open to this and the President is too, despite fierce opposition from trial lawyers. Reform could be passed in the first few months of 2015.

Fourth, an overhaul of our drug policy, specifically a recognition of state laws on medical and recreational marijuana. The President has occasionally made noises on this and a majority of Americans now favor pot legalization. The Republicans can get ahead of the Democrats on this by embracing a federalist approach: states that keep pot illegal will still have the aide of the DEA in keeping it illegal; states that make it legal will be left alone. I have little hope the Republicans will do this, but it would be a great step for them.

Fifth, an overhaul of Obama’s anti-terror powers. Justin Amash and Rand Paul give me hope that the GOP may be open to this. The best thing about reigning in Obama’s police state would be exposing the lie that the Democrats are the party of civil liberties and personal freedom.

That’s just for starters. There are other things: more spending cuts, reigning in Obama’s foreign policy and executive power excesses, a symbolic repeal of Obamacare (symbolic because it will be vetoed). But I see the above as doable and I see it as proving the GOP’s supposed small-government bona fides. If they’re serious, they will do something along these lines.

I have no doubt that the Republicans will run into opposition from the President. In fact, his petulant press conference seemed to promise that he would do what he wants on issues like immigration and only invite cooperation on his agenda. We’ll see what happens behind closed doors. This President has, on occasion, compromised with Republicans. But he has also been willing to take a my-way-or-the-highway approach, particularly when he had Congress for the first two years (Republicans were invited only to tweak details of Democratic legislation; kind of like being asked which arm you want the shark to bite off).

But if the President is determined to pursue his agenda and won’t cooperate, then pass the legislation anyway. Force him to veto it. Force him to oppose. Force his party to go on record as the party of bigger taxes, more government and no reform. Force him to tie his former Secretary of State and Heir Apparent to his unpopular agenda.

That’s something you can run in 2016. That’s something that might bring my vote in 2016. Until then, I will remain skeptical of the GOP and their commitment to small government.

Quick: What do Republicans want in exchange for ending the government shutdown? If you know the answer, congratulations — because Republicans sure don’t.

…

we’ve gone from defunding Obamacare . . . to delaying Obamacare . . . to delaying parts of Obamacare . . . to funding the government piecemeal without touching Obamacare at all. If Republicans have already conceded the defunding of Obamacare, what’s the point of keeping the government closed? Why on earth would the GOP pass “clean” bills to fund individual parts of the government but not the whole government?

This business of passing funding bills for little piece of the government has been driving me a bit crazy. In a rational budget process — even in a shutdown — you would carefully pick which parts of the government to fund. But it’s clear that the strategy has been to identify whatever parts of the government are getting the most complaints (NIH, park service, etc.), pass a tiny bill to fund them and then go on television to bash the Democrats for not assenting to it.

That wins the media cycle but it’s no way to run a government. It’s completely arbitrary. It means that we try to divert funds to highly visible things like the Park Service, which would be one of the last things I would fund right now. More, it encourages partially shutdown services to deliberately make things worse to get their funding restored. Gain Nortion, Bush’s former Interior Secretary, describes how the Park Service has a long history of deliberately inconveniencing people whenever their budget is threatened (this weekend, they have “closed” the Vietnam Memorial — which is a wall that anyone can visit 24/7). No doubt, the Administration doesn’t mind this sort of visibility. But by putting forward little bills to fund whichever government agency is making the loudest noise, the GOP is encouraging this sort of behavior.

Back to Thiessen:

It calls to mind the episode of “Seinfeld” where Jerry and George are coming up with an idea for a show to pitch to NBC — and decide it will be “a show about nothing.” That’s what this standoff has become — the Seinfeld Shutdown, a shutdown about nothing.

Thiessen, however, is not just throwing bricks. He has an alternative proposal: that instead of using the shutdown or the debt ceiling for leverage, the Republicans use the Budget Control Act (aka the sequester). Grover Norquist is on the same page:

I think the original plan for the Republicans was to move the continuing resolution past the debt ceiling and then to sit down with Obama and decide whether he would be willing to trade some relaxation of the sequester for significant reforms of entitlements. That was something Obama might well do. Democrats in the House and the Senate are very concerned about caps and limits in sequestration. Republicans could get significant long-term entitlement reform — all on the spending side, I’m assured by leadership — for some relaxation of sequester.

See, this is what an actual compromise would look like. The Republicans are running around saying Obama won’t compromise because he won’t delay or change Obamacare. But they are not offering anything in exchange other than not blowing up the government. A sequestration-for-entitlements exchange would be a real compromise, giving Democrats something they want. But it would still be a huge win for Republicans — a few billion in spending now for statutory changes in entitlements (e.g., chained CPI) that could save trillions down the road. Statutory changes in entitlements are an especially good thing because, unlike sequestration, they would be very hard for future Congresses to undo.

The thing is, our budget situation is a bit tricky right now. The FY 2013 deficit is below $700 billion and projected to fall more in the next few years. But starting around FY 2018, it starts ramping up again. The reason is entitlements — the wave of retiring Baby Boomers putting a strain on Social Security and Medicare spending.

(This long-term situation has, over the last few years, gotten a lot less horrifying by trillions of dollars. The reason is that healthcare spending has leveled off. Obama is trying to claim credit for this but he’s a bit hoist by his own petard. He delayed Obamacare until after the election both to avoid the political hit and to force the CBO to claim that it decreased the deficit. But those delays also mean the cost curve bent before he did anything. The reasons the cost curve has come down are mainly the down economy and the natural saturation of the healthcare market. I said years ago, when people were projecting that healthcare would eventually consume 2,634% of our GDP, that if something can’t be sustained, it won’t be. It couldn’t and it wasn’t.)

The time to strike on entitlements is now. The longer we wait, the harder it will be and the more dramatic the changes required. You reform entitlements and keep discretionary spending level and you will basically balance the budget within the decade without any further action. Cutting spending further will make the situation even better, but … further cuts will entail either cutting defense spending (which the Republicans oppose) or more discretionary/entitlement spending (which will not happen until the GOP wins an election; which will not happen until they show they can govern).

There are whispers that this deal may happen but it seems to be focusing more on yet another budget committee. But we’ve had eight — count ‘em — eight budget committees. We don’t need another one to tell us what we need. What we need is a deal.